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Cornwall and Isles of Scilly Smart Specialisation Framework Summary

Background and Progress to Date The Cornwall and the Isles of Scilly LEP has undertaken a considerable amount of work during the summer of 2013 in the developmental work required to produce a Smart Specialisation Framework. This work has been carried out by the LEP Research, Knowledge and Innovation Board, supported by an Innovation Working Group. This work initially identified 4 potential areas for Smart Specialisation investment. Following further discussions with partners a further 3 areas have been identified which will require further investigation over the autumn. The LEP commissioned Catalys in August 2013 to review the work carried out and help develop a methodology for the final strategy. Catalys reported their findings on 1st October 2013. The report provides the following information: Introduction Context Evidence base Vision for the final Smart Specialisation Framework Priorities Recommendations The report is still draft in terms of many of its findings and will form the basis for a further piece of work that will be commissioned in the autumn to finalise our Smart Specialisation Framework. Nevertheless, we have included the introduction, priorities and recommendation to provide an overview of the process we have followed and the findings and recommendations to date. We would like to extend our thanks to Catalys for the work that they have carried out on our behalf and the progress that we have made.

Extract from the Catalys Report

September 2013

Introduction This report has been prepared by Catalys and Innovative Futures Research (IFR). We were commissioned by Cornwall Council on behalf of the Cornwall and Isles of Scilly Local Enterprise Partnership on 28th August 2013 to assist in developing the Cornwall and Isles of Scilly Smart Specialisation Framework, with a draft report required by 23rd September 2013. The brief requested assistance in completion of Steps 1, 3 and 4 of Guidance for the development of Smart Specialisation Frameworks. The Framework is a necessary pre-requisite for the release of funding for research, development and innovation within the next EU Strategic and Investment Fund (SIF) strategies being prepared by Local Enterprise Partnerships. Steps 1, 3 and 4 address:

Step 1 – Analysis of the regional context and potential for innovation

Step 3 – Development of an overall vision for the future of the region

Step 4 – Identification of priorities Work Prior to the Commission A considerable amount of work had been completed prior to this commission, through a LEP Innovation Working Group and Innovation Board, meeting as part of the LEP’s overall structure for developing its SIF proposals. This had included identification of four potential Smart Specialisation areas, given to us as the Information Economy, e-health, agri-tech and marine offshore renewables. The prior work undertaken by the LEP Innovation Working Group and Board had followed the six step guidance for development of smart specialisation frameworks and is summarised in the following table: RIS 3 Process Steps Cornwall and Isles of Scilly position Step 1

Analysis of the regional context and potential for innovation

Activities undertaken: - Headline evidence base - Detailed innovation and R&D evidence

base - Preparation of case studies showing key

assets (actual and emerging)

Step 2

Governance: Ensuring participation and ownership

- An initial consultation (2012) with the private sector to discuss innovation and R&D

- Establishment of an Innovation and R&D Strategy Board with representation from private, public and HE/FE partners

- Establishment of Innovation and R&D Working Group with representation from private, public and HE/FE partners

- A stakeholder workshop (2013) to

discuss where we are now, potential strategy for the future and areas of strength for smart specialisation in the future

Step 3

Elaboration of an overall vision for the future of the region

Developed the Smart Specialisation Framework based upon all input from Step One and Step Two

Step 4

Identification of priorities

These have been developed by the Innovation and R&D Board and Working Group based upon input from the 2013 workshop, the evidence base (and now the work undertaken by the independent expert team). The priorities are draft to date – with identification of where further research / evidence is required.

Step 5

Definition of coherent policy mix, roadmaps and action plan

Drafting of Cornwall and Isles of Scilly Local Enterprise Partnership EU Structural Investment Fund Strategy; roadmaps for smart specialization themes still be developed

Step 6

Integration of monitoring and evaluation mechanisms

To be completed

Early work on the development of an evidence base for Research, Innovation and Knowledge clearly identified a low level of investment in Research and Development (R&D) and a low level of innovation activity. The Cornwall and Isles of Scilly approach to addressing this situation is twofold:

1. Smart Specialisation: targeting investment in areas of potential competitive advantage for Cornwall and the Isles of Scilly’s economy.

2. Broader ‘Innovation for Growth’ activities: there is a recognised need for parallel investment in a broader range of activities that will support businesses to engage for the first time - ‘Innovation for Growth’. This would encompass investment in awareness raising, engagement and early steps activities in relation to R&D and innovation.

This Commission Catalys/IFR was commissioned to review the work undertaken to date and to test the realism of the areas identified for Smart Specialisation. This has been done through:

review of existing documents already developed by the LEP Innovation Working Group,

further research and development work, which included: o Review of global emerging market opportunities. A particular

requirement of the brief was to scope global emerging market opportunities and whether smart specialisation priorities for Cornwall and the Isles of Scilly could open up global markets to local businesses.

o Use of the innovation ecosystem functional model and review of potential smart specialisation priorities against this

o Assessment of the Cornwall and Isles of Scilly (C&IoS) innovation context using innovation metrics and the innovation functional model

o Use of the innovation value chain (IVC) concept o Assessment of C&IoS innovation support assets and current

Convergence funded projects against the IVC and the functional model

discussions with key stakeholders on the Innovation Working Group and Board.

Our approach has been to bring the work done to date by the LEP into a logical framework, alongside the further research undertaken by the study team. The framework adopted is the Innovation Functional Ecosystem Model developed by NESTA, and the related concept of the Innovation Value Chain, in order to structure and consider the evidence collected (Step 1) and to test proposed priorities (Step 4). This report combines our research with other information provided to us, to provide a first draft Smart Specialisation Framework. Areas for further development over the next few months to January 2014 are identified, acknowledging that this is a draft and further work is needed. The draft Framework is structured as follows:

An initial context section (Section 1), to set out the innovation policy and market context and provide an overview of the innovation functional ecosystem model and its importance and relevance in considering how innovation can be supported and developed

Review and analysis of the Cornwall and Isles of Scilly innovation evidence base (Section 2), identifying challenges, gaps and opportunities on which to build Smart Specialisation activity. This responds to the Step 1 RIS3 Guidance requirement

A proposed approach to a vision for the Smart Specialisation Framework (Section 3, responding to Step 3 of the RIS3 guidance)

Review and assessment of proposed Smart Specialisation priority areas (Section 4, responding to Step 4 of the RIS3 guidance)

Recommendations for progressing development of the Smart Specialisation Framework to January 2014 (Section 5).

We are grateful to all those who we have consulted and have provided insights and information for the study. We are particularly grateful to the team at Cornwall Council who have provided very proactive support.

4. Smart Specialisation Priorities

4.1 Overview Smart specialisation is expected to build on local strengths, competitive advantages and potential for excellence, as well as be able to support technological as well as practice-based innovation and stimulate private sector investment. What is important for smart specialisation priorities, and borne out in consultations both by the LEP and for this review, is the need to build on existing strengths and future potential by developing the opportunity for businesses in Cornwall and the IoS to gain economic benefit from existing R&D strengths. There needs to be a relationship between the R&D excellence that Cornwall and the Isles of Scilly is developing and its potential to deliver economic growth with local businesses, as well as ‘export’ and capitalise on that R&D excellence beyond the region.

4.2 Review of Potential Priorities against Innovation Ecosystem Functional Model It is critical is that all parts of the smart specialisation priorities are delivering in the context of the innovation ecosystem functional model and supporting businesses across their progress through the innovation value chain. To this end we have reviewed each of the four potential smart specialisation priorities initially identified to us against innovation ecosystem functional model headings1. The following tables set out our review of each of the four potential smart specialisation themes against the innovation ecosystem functional model framework conditions. It also identifies where further work will continue to develop the review, acknowledging that the process of developing the Framework is still ongoing.

1 Largely drawing on Positioning papers prepared by Innovation Working Group partners and our own market demand assessment work, together with points raised in stakeholder discussions

4.2.1 Potential Priority Market Specialisation Area: Agri Tech Development of an agri-tech focus builds on existing strengths in developing agri-food and drink as a theme in C&IoS. Agri-tech is intended to take forward aspects of this earlier focus to greater levels. The smart specialisation theme of agri-tech is seen as a contributor to a much wider agri-tech development programme developed for the SIF. In the UK Agri-Tech Strategy there is a commitment to a range of actions that will realise the vision of enabling the UK to regain its world-leading role in better, more efficient and more sustainable agricultural production. Central to this is rebuilding the connection between basic research and applied science to create modern systems that allow farmers to access agri-tech expertise and use innovative techniques. Potentially one of planned Centres for Agriculture Innovation could be located in Cornwall, specialising in dairy and perhaps adopting the model from the three other Innovation Centres established in Cornwall under the Convergence Programme. There could be potential for businesses in C&IoS to make use of the Agri-Tech Catalyst Fund for projects as match for ERDF to develop products from the laboratory to market. Increased productivity in agri-tech businesses can be reflected in increased yields and average productivity of labour. Innovation is a vital contributor to productivity growth and the generation of new knowledge is a pre-requisite for building innovative capacity. Agri-tech businesses can integrate new knowledge to improve their capacity to develop and commercialise new ideas. This new knowledge can come through new technologies and processes including effective exploitation of new informatics, building on the skills of existing and new staff and exporting to growing markets. Choosing investments which help to deliver productivity improvements, jobs and GVA growth will therefore be important. Knowledge Creation Existing knowledge partnerships that C&IoS is connected into: The Peninsula Partnership for

Rural Environment (www.PPRE.ac.uk) Universities of Exeter and Plymouth, North Wyke Research and Duchy College. It includes under its umbrella the Centre for Rural Policy Research, University of Exeter, and the Centre for Agricultural and Rural Sustainability, University of Plymouth, and the North Wyke Farm Platform. Food Security and Land Research Alliance www.fslra.ac.uk/about/. Rothamsted Research, Exeter University, Cardiff University and Bristol University, Duchy College and the Agricultural and Horticultural Development Board. www.ahdb.org.uk. The AHDB

is at the forefront of developing applied knowledge for the UK farming sector using industry levy funds. Currently 4 major projects run in Cornwall and the SW in partnership with AHDB and Duchy College in Cereal Production, Brassica production and Animal Health, and upland management.

‐ Public Research; what is being produced and where is it disseminated/used. Potential to capitalise on this on a local and global stage? Links with local business development – how will this work

Nationally, it is suggested that the country has not been as effective as it should be in spreading the advances from agricultural research institutes out to the working farmer2. The UK Agr-Tech Strategy Paper suggests that in the dairy sector, the best 10% of dairy farms deliver 40% more yield with 11% less feed. The key difference between them and other dairy farmers is knowledge. In this context a part of an Agri-tech SMART Programme for Cornwall and the IoS is intended to focus on a strategic knowledge creation and exchange programme, to build on current academic, research and industrial partners networks, infrastructure and capacity. This is intended to bring the knowledge into agricultural businesses across the supply chain, using R&D and innovation to help them improve productivity and achieve economic growth. The areas of R&D and innovation indicated relate to innovations to reduce farming inputs and so improve farming efficiency and productivity; and innovations related to wider ecosystems and climate change factors in which agriculture operates. This accords with the UK Agri-tech strategy which indicates the UK is a world leader and well placed to develop knowledge around ‘sustainable intensification’ (doing more for less). Knowledge would come not only from local research activities but also from working with LEPs elsewhere (e.g. Devon and the SW, East Anglia, Northern England) and through work with agri-tech platforms within the Horizon 2020 programme led by the AHDB. This is seen as vital because agriculture needs to innovate to make changes now and therefore needs to capitalise on R&D. Area for further investigation:

Clarify what research has come out of C&IoS and how used. Clarify what will be the focus of R&D and innovation areas to be developed/brought into C&IoS

Enterprise ‐ Entrepreneurship; what is

the business base at present, who is involved;

In Cornwall 11.3% of the workforce is employed in core agri-food activities, compared to 4.5% for Great Britain Agri food sector has been the subject of intensive development over the past 7 years through

2 Eight Great Technologies, David Willetts, 2013, p39.

what is the potential, supply chains, what can be developed/retained in C&IoS. How will this deliver jobs and GVA?

Convergence funded initiatives (and earlier Objective 1 projects). Cornwall Agri-Food Council, an active forum for the sector, providing strategic leadership and planning and engagement and representing a food economy worth in excess of £3bn per annum. 50% of employment in food and drink processing and manufacturing in the South West is concentrated in Devon and Cornwall. There are examples of highly innovative businesses in the agricultural sector e.g. in dairy genetics through to farm machinery innovations This indicates that the agri-food sector has a comparative strength in Cornwall & IoS. Specialisation from this into agri-tech has this foundation on which to develop. Area for further investigation: Further work on relative position of agri-food in C&IoS compared to nationally; and supply chain developments.

‐ Innovation infrastructure; Knowledge and expertise – who and where is this (people and facilities). Are there gaps and what is needed to fill these – with what business benefit

Current Facilities with knowledge and expertise: Duchy College Stoke Climsland and Rosewarne. Significant infrastructure exists at the College. Duchy College is now one of the largest specialist land-based colleges in the UK. Significant investment is being made in new applied research facilities in dairy production, agricultural and land-based technologies, animal management and higher education. The college already houses leading knowledge and skills facilities for food production and added value at its Stoke Climsland Agri-Food Innovation Centre3. Duchy College Rural Business School: the largest successful programme of knowledge exchange under RDPE in the UK; Rural Business Research www.fbspartnership.co.uk. The most comprehensive data collection and analysis resource for farm business economics in the UK is based at Duchy College. ESI – The Environmental and Sustainability Institute at Tremough near Falmouth, leading cutting-edge research into solutions to the problems of environmental change Area for further investigation Clarify potential of ESI to support this smart specialisation theme

Capital

3 http://www.foodinnovation.co.uk/facilities.php

‐ Finance – ease of access and gaps. What is needed to fill gaps with what business benefit

The Agri-Tech SMART programme in Cornwall is proposing a Farming and Food business escalator programme involving benchmarking businesses and providing business specific initiatives that can encourage R&D and innovation to be owned and put into practice by businesses. These are currently suggested as processing and adding value vouchers; business development grants and loans; and production sector vouchers. Area for further investigation: Develop discussion around access to finance in this area; what are the issues and needs

‐ Skills – what skills are needed and are these available in C&IoS. Where are the skills gaps and what is needed to fill them.

Area for investigation: Identify what skills are needed for agri-tech specifically, whether these are available locally and/or what skills development is required

Markets ‐ Competition; where are

the current markets and what is the extent of competition (and across the supply chain); how may this change through market development and how can C&IoS benefit from change. What is the competitive edge for C&IoS

Cornwall’s climate gives it a competitive advantage in forage cropping and grassland management; livestock farming accounts for 74% of the total value of farm produce4. Its warmer maritime climate also gives the industry a climatic advantage enabling early production of vegetables, fruits and horticultural produce, and flowers on the Isles of Scilly. Cornwall and IoS still has a very diverse agricultural land use capable of supporting innovation and expertise in many cropping systems. There is exporting of produce from C&IoS to a global market and this could increase. Areas for further investigation:

Competitive edge beyond climate; strength of livestock, scale of agricultural production and processing sector compared to elsewhere

Clarify the opportunities for exporting from C&IoS Discuss how C&IoS could work with developing countries (given that these will be an emerging

4 A Review of Cornwall’s Agri-Food Industry, University of Exeter, 2011.

market) ‐ Demand; to what extent is

this market area demand or solution led; how is demand changing and what is the potential impact of this for business development. Will solutions led markets lead to business development opportunities C&IoS can capitalise on and if so, what are these

The global market for agricultural inputs is currently estimated at $400bn with prospects of high growth

The UK Agri-tech Strategy sets out that the UK has been a world leader in agricultural science developments and is therefore well placed to continue working around ‘sustainable intensification’ (doing more for less), a global challenge

Global demand for dairy products is predicted to grow by 15% between 2012 and 2020 The bio-economy could contribute over $1 trillion of Gross Value Added (GVA) in OECD countries by

2030, of which 36% will come from primary agricultural production There will be growing demands for greater efficiencies in yields due to impacts on land, energy and

water resources Food security is an issue of international concern; the global food system will experience an

unprecedented confluence of pressures over the next 40 years. Rising population will be a key driver of demand. The UN forecasts that global food production will

need to increase by over 40% by 2030, and 70% by 20505. The world market is noted as increasingly likely to shape the UK dairy commercial environment6 (important to Cornwall). Global demand for dairy products is predicted to grow by 15% between 2012 and 2020, equivalent to an annual growth rate of almost 2%.

Resource efficiency will also be a driver of market growth - there will be growing demands for greater efficiencies in yields due to impacts on land, energy and water resources. Dairy UK note the dairying sector as technologically complex and requiring continual technological development to maintain product safety, improve efficiency and sustainability. Market growth is likely to be a combination of demand and solution driven approaches.

Market opportunities suggested for the Agri-tech smart specialisation: ‐ Modern technologies improving precision and efficiency of management and husbandry practice and

the supply chain. ‐ System approaches to better manage soil, water, crop and livestock interaction. ‐ Integrated approaches to animal disease management in farming systems.

5 http://www.un.org/waterforlifedecade/food_security.shtml 6 Dairy UK White Paper 2012

‐ Innovation and value development in livestock based food products. ‐ Develop evidence based approaches to valuing ecosystem goods and services. ‐ Extend and develop skills and cpd of researchers, practitioners and advisors to achieve impact. ‐ Integrated approaches to weed, disease and pest management. ‐ Waste and GHG reduction in products and processes in the food chain. Area for further investigation: Clarify the suggested market opportunities to be developed and how they will support productivity and lead to economic growth

1.2.2. Potential Priority Market Specialisation Area: e-health and e-wellbeing (eHealth and eWellbeing is used as a collective term for technology-mediated health and wellbeing). E- health fits within The NHS information strategy set out in “The Power of Information: Putting us all in control of the health and care information we need’ (Department of Health May 2012). The investment in superfast broadband has given Cornwall a leading edge in being able to develop ICT solutions and lead research; for example on tele-health and tele-care as a result of BT setting up its National Centre for Excellence in Cornwall. C&IoS has the ability to take a lead at national level in developments in this area. Knowledge Creation C&IoS is well represented within the NIHR-funded SW Academic Health Science Network (AHSN), the

future SW Collaborations for Leadership in Applied Health Research (CLARHC), and the SW Public Health Network, as well as a number of relevant interest groups such as the Peninsula Environment and Human Health Forum. The University of Exeter is a member of the “GW4” with the Universities of Bristol, Cardiff, and Bath, thus able to leverage support from other key universities in the region and beyond. All CUC University partners work with European partners, attracting EU research funding: Plymouth University’s Cognition Institute’s CogNovo and Aliz-E projects (www.aliz-e.org); Falmouth University has a strong collaborative partnership with Swedish institutions in the field of digital gaming including Gothia Science Park/University of Skovde; and Plymouth University with Queensland University of Technology which is pioneering the development and adoption of eHealth in Australia; The University of Exeter’s European Centre for Environment and Human Health has been invited to become a collaborating Centre by the World Health Organisation (WHO) in the area of public health protection.

‐ Public Research; what is being produced and where is it disseminated/used. Potential to capitalise on this on a global stage? Links with local business development – how will this work

Plymouth University has a strong track record in interdisciplinary research in relevant domains including: health decision-making; telehealth (e.g. e-Caalyx and LiveWell); “big data” (e.g. BioPattern); user-led e-health (e.g. SharpTalk and Diabetes App Challenge); social robotics (e.g. ALIZ-E and ROBOT-ERA); computer-aided diagnosis (e.g. ACEmobile); development of novel mental health and behaviour change interventions including eHealth interventions (e.g. Face It); and e-health implementation studies (e.g.Superfast evaluation, Plymouth SeniorNet). Plymouth University also manages three Innovation Centres in partnership with Cornwall Council, including the Health and Wellbeing Innovation Centre in Truro. Falmouth University including AIR has a number of relevant areas of research, which include: the use

of digital games applications and games thinking / games psychology in applications to health and wellbeing; Internet of Things related research – emerging user interface design expertise; the integration of smart home technology and superfast broadband for the delivery of remote service provision, current trials include residential care home partners in Cornwall; the application of the arts to health and wellbeing and the potential delivery of arts/collaborative creative practice to multiple organisations/people to improve the business model; design thinking and emergent work on design for dementia; potential around the convergence of TV and Internet and the digital TV becoming the central communication device applying media and communications expertise; the use of video as a delivery mechanism including the need to train staff on interacting with patients on-line. University of Exeter, a member of the Russell Group, has research expertise across the science, technology, engineering, and medical (STEM) fields, including active research in to electronic monitoring, robotics and environmental sustainability. In Cornwall, the University has considerable interdisciplinary expertise the natural environment, clean technologies, social sciences and life sciences. The ECEHH and ESI has mathematical modelling capability which can be applied to both the environment and to population modelling. It has an active programme of business engagement and knowledge exchange which reaches across all business sectors. Through the University of Exeter Medical School (UEMS), a member of the NIHR National School of Public Health, the University works closely with all NHS Trusts and private sector providers of health care in the county. UEMS has research specialists in behaviour change; health service research including patient and public involvement in clinical trials; and a strong partnership around big data and personalized medicine with Quintiles. At its European Centre for Environment and Human Health in Truro, interdisciplinary research teams explore the connections between health, wellbeing and environment, including projects funded by MRC, ESRC, NERC, BUPA and others. Truro and Penwith College is working with key private and public sector partners to support e-health in Cornwall. In relation to telehealth and research, development and innovation, the College will be aiming to use its considerable expertise in relation to Vocational Skills in the Health & Social Care Sector and in Leadership Training to work with BT and the public sector in Cornwall to facilitate culture change. Cornwall College has been involved in the delivery of qualifications for telecare and telehealth practitioners for well over 10 years. The College has developed strong links with the Telecare Services Association (TSA) - the industry body for telecare and telehealth. It currently offers a number of industry recognized level 2 and 3 certificates in related subjects. In addition, the College has extensive links with local business, and has a responsive business support service. Potential for links into HORIZON 2020 and TSB research activities; and application into emerging

markets e.g. South America, Africa. Enterprise ‐ Entrepreneurship; what is

the business base at present, who is involved; what is the potential, supply chains, what can be developed/retained in C&IoS. How will this deliver jobs and GVA?

Health is the second largest contributor to the Cornish economy after Tourism (The sector includes companies already engaged in developing technological solutions to support improved health and wellbeing services (e.g. Hanson Care). Technology development companies (e.g. Carnego Services) are developing new, innovative equipment that can be integrated into eHealth and eWellbeing solutions and, in the area of digital communications, the County hosts a number of innovative web design and content specialists (e.g. fFunction, Sea Communications, Fizzcast and Buzz). Cornwall has a number of established companies with a global reach and high growth potential (e.g. Head Forwards, Sullivan Cuff Software and Microtest7), and a significant number of new companies drawing on the talent of CUC graduates to expand or develop their products and services. The BT Cornwall Partnership launched in July 2013 will be delivering a range of services including telehealth and telecare. Areas for further investigation:

Clarify statement on health contribution to local economy Clarify the potential supply chains

‐ Innovation infrastructure; facilities, knowledge and expertise – who and where is this (people and facilities). Are there gaps and what is needed to fill these – with what business benefit

High quality connectivity is a key criterion for a successful eHealth and eWellbeing system, regardless of the technology being employed. The comprehensive coverage of the Superfast Cornwall (and associated networks) is an important enabler and resource. In addition, the wide spread coverage and use of digital television ensures technological choice. The intermittent mobile coverage provides some challenges for m-health applications, but Cornwall is not unique in this; finding systems that can be applied across multiple platforms is inevitably the way to develop e-health and e-wellbeing solutions to be globally appropriate and exportable. Cornwall and the Isles of Scilly has already identified health and wellbeing as a key challenge and opportunity going forward. This is reflected in investment in the Health and Wellbeing Innovation Centre8, the European Centre for Environment and Human Health9 and the Knowledge Spa10

7 Headforwards has a major contract with NT – Japan’s telecoms corporation; Engineered Arts (Robotics and human-robot interaction) has a contract with NASA and markets include national science centres, visitor attractions, commercial users and academic research institutions around the world; Sullivan Cuff Software produces award winning software in use in nearly 2000 locations in the UK and abroad, describing itself as the market leader in warfarin dosing software; Microtest the ‘fourth largest Primary Care Clinical System supplier in the UK.’ They were a finalist in the eHealth Awards – EHI – for best use of mobile technology in healthcare. 8 Health and Wellbeing Innovation Centre provides exceptional supported workspace for businesses within the health and wellbeing sector

Developing and testing facilities at AIR at Falmouth University; research laboratories and High Performance Computing capacity in the Environment and Sustainability Institute; Health and Wellbeing Innovation Centre. Access to super-computing capability at The Met Office (through University of Exeter) and data management capability at BT Cornwall strategic partnership Area for further investigation: Identify if there any connectivity gaps that need to be filled to facilitate this market opportunity

Capital ‐ Finance – ease of access

and gaps. What is needed to fill gaps with what business benefit

The In Residence scheme managed by ECEHH provides early funding to research early stage development of ideas (maximum 12 days financial support to a business to research an initial idea with an academic). There is a perception that very early stage funding to support initial investigation of an idea is difficult for a micro business in particular to provide – hence the scheme. Perception of a need for proof of concept funding in healthcare technologies Area for further investigation:

Scope evidence of an issue around access to finance by businesses to engage in relevant R&D and innovation


Areas for further investigation: Scope skills and understanding needed for those in the technology sector to work within a health

setting to come up with digital innovations; in particular in relation to NHS medical settings More generally identify any skills issues associated with realising this market opportunity


the current markets and what is the extent of competition (and across the supply chain); how

Cornwall and the Isles of Scilly are leading on developing solutions appropriate for rural and remote communities giving it a competitive advantage (other areas developing e-health and e-wellbeing are urban based). Cornwall already has joined up governance, and on-going efforts to join up its healthcare systems. The C&IoS work is also focusing on e-wellbeing (preventative work), again a competitive advantage compared to other areas whose focus is solely e-health

9 European Centre of Environment and Human Health is an inter-institutional research centre bring together academics, scientists, businesses and communities to tackle the issues of environment, health and wellbeing 10 Knowledge Spa delivers education and training at the Royal Cornwall Hospital

may this change through market development and how can C&IoS benefit from change. What is the competitive edge for C&IoS

Cornwall has built an internationally recognized higher education sector (including in wellbeing research and training) with extensive experience in knowledge exchange and research with the business community including SMEs. There is also a rapidly growing number of Cornish SMEs with technology expertise who are flexible and adaptable to this rapidly changing sector.

‐ Demand; to what extent is this market area demand or solution led; how is demand changing and what is the potential impact of this for business development. Will solutions led markets lead to business development opportunities C&IoS can capitalise on and if so, what are these

Global potential markets for mobile health products has been estimated at $60bn over the next 10 years

Estimates of recent market research for global e-health range from $96bn to $160bn, with 5 year growth rate of 12%-16% from 2010 to 2015

Drivers for demand are suggested as a combination of demand led and solutions led e.g. demand

for increased consumer participation in healthcare beyond hospital care setting and the impact of eHealth in quality and costs terms.

Internationally, governments are looking for new and efficient health delivery systems. e-health is a major opportunity for emerging markets in developing countries such as South America and Africa who need to develop health services from a very low or nil base.

With the rapid aging of global populations and the consequent increase in age related chronic disease, the increase in lifestyle-related conditions (e.g. obesity), and the looming international shortfall of professional staff, there is need to redesign health services to ensure the best user and provider outcomes while maximising the efficiencies technology can mediate.

Within the UK the NHS is seeking to provide eHealth solutions. Private health providers, care homes, insurance companies, etc are also looking for technology to help improve customer and worker health and wellbeing, with consequent benefits to efficiency, productivity, sustainability, and ultimately the “bottom line.”

Areas of R&D and innovation to support market development are suggested as: ‐ Exploring different methods of iterative and bidirectional communication and engagement with

communities to understand the barriers and enablers of technology to deliver prevention, health and social care;

‐ Understanding the role of people (both professionals and community-based) in the drive for a “technology-rich” but “user appropriate” health and social care system.

‐ Establishing the connections between the investment in preventative care and home-, workplace-, and community-based care and cost savings through reductions in hospital and care home curative

care; ‐ Providing the evidence of successful, sustainable and cost effective health and wellbeing

interventions and outcomes through appropriately designed research and evaluation; ‐ Creating a policy-testing environment for new remote information technologies, processes and

systems (especially in the health and environment sectors); ‐ Establishing the full impact of technology-based health and wellbeing social care throughout a

person’s life in home, workplace and community; ‐ Extending the application of gaming technology to the health and wellbeing sector; ‐ Understanding the impact on other health and social care services of prolonged use of assistive and

innovative communication and delivery technologies; ‐ Providing the appropriate skills and training needs for current and future healthcare providers and

technology users; ‐ Extending the use of Citizen Science to engage the people of Cornwall in the development of new

services. Area for further investigation:

Clarification of how efficiency measures engendered by e-health and e-wellbeing could lead to jobs and GVA growth potential

Clarification of the business development opportunities across the supply chain

4.2.3 Potential Priority Market Specialisation Area: Information Economy The UK Information Economy Strategy (June 2013) focuses on creating the environment in the UK that allows information economy businesses large and small to innovate and thrive. A key part of this Strategy will be supporting SMEs, in order to meet the ambition that the UK is the best place in the world to start and grow a technology business. Big Data has two main problems to be solved: improving the ability of European companies to build innovative data products and services and solving fundamental research problems related to the scalability and responsiveness of analytics capabilities. Knowledge Creation ‐ Public Research; what is

being produced and where is it disseminated/used. Potential to capitalise on this on a global stage? Links with local business development – how will this work

Computing capability: High-powered performance computing capacity exists in the University of Exeter’s ESI. UoE collaborates with the Met Office in climate science that plans to upgrade its supercomputing capability. There is likely to be potential to access very large environmental data sets as part of government policy to open up access to their big data sets. Plymouth University has capacity and expertise in GPU computing and partnerships with companies such as NVIDIA. Plymouth University is undertaking world-leading research in computational and cognitive modelling to investigate the interaction between humans and intelligent systems; and the transfer of these models into real-world applications such as robot companions for hospitalised children and for elderly care. Data Science: UoE Research capability in generating and analysing large scientific data sets in a range of scientific disciplines including mathematical modelling and predictive capability for life sciences, engineering and geotechnics, environmental resources (e.g. wave energy), human and animal population behaviour. Existing academic and research capability in generating and using large data sets in the University of Exeter in Cornwall, including in the ESI, clean technologies, the natural environment, social sciences as well as the life sciences (Centre for Ecology and Conservation) and also the University of Exeter Medical School’s European Centre for the Environment and Human Health which accesses and interprets large population data sets to underpin a number of key areas of research. Smart Systems:

Both Falmouth and Exeter Universities have experiments underway which may lead to innovations in the deployment of smart technologies. Falmouth is collaborating with Cornwall Council and BT on the use of ‘smart’ technologies within care-homes as a follow-on from the County’s participation in the Whole Systems Demonstrator project. Falmouth is collaborating on the TSB Internet of Things programme working with Westminster Council, IBM, EDF, University of Bristol, SH&BA and others on interoperable service applications. Information/data and the arts: Falmouth University’s Academy for Innovation & Research (AIR) Studio, Plymouth University’s IDAT and the Pervasive Media Studio in Bristol form part of a regional backbone of like-minded studios for a growing community of researchers and businesses innovating in the creative application of technology. Cornwall-based PhD research supervised jointly across Falmouth, Plymouth and Exeter includes commercial, cultural and social organisations to bring an inter-disciplinary approach to the impact of the Information Economy, from new business models, communication strategies and the convergence of design and traditional crafts such as ceramics and boat-building to instrumenting spaces to improve the quality of interactions between people, and buildings and the spaces in-between. Falmouth University and Plymouth are investing in combined creative -technical skills such as digital games and interactive systems. Falmouth’s award winning Autonomatic research group has pioneered the integration of digital design, manual craft practice and 3D manufacture using the IE infrastructure to combine the manual skill and feel for materials of traditional craft with digital production technologies. IDAT is undertaking research on the Internet of Things to provide a platform for increased audience engagement, participation and feedback for partners including Cornwall Mining Heritage, Plymouth University’s Interactive Systems Studio (ISS) which is pioneering interactive training simulations and iOS app developments Cyber Security; Secure South West is a university-business-government research programme and associated annual conference which seeks to improve privacy and cyber security in Cornwall, IoS and the region, led by Plymouth University’s Centre for Security, Communications and Network Research (CSCAN) in partnership with companies including Kaspersky. The above indicates there is a wide range of R&D work taking place in C&IoS. As the UK Information

Economy Strategy sets out, the information economy is better seen as an ecosystem rather than a sector, encompassing software, IT services, communications and data management. Hence the strategy looks at enhancing competitiveness built on use of ICT, supported by skills and digital infrastructure developments. This may also be the appropriate response for the information economy in the context of a smart specialisation framework –as an underpinning element rather than a specialisation in its own right. Areas for further investigation: Clarify how current HE collaborations beyond C&IoS eg autonomatic project, will benefit C&IoS businesses



The Cornwall ICT Digital sector comprises 1,035 businesses and employs 5,100 people5. The sector accounts for 4.6% of all Cornwall businesses. Although this is below the level seen in the South West (7.8%) and GB (8.8%), the sector in Cornwall has bucked national trends. It is profitable, growing, innovating and diversifying. Employment is reported as increasing by 26% and turnover by 24% between 2009 and 2012. Cornwall’s large and data-rich health and public administration sectors can act as demand stimulants to the ICT/creative and other relevant sectors in terms of encouraging information/big data innovations, potentially through proactive procurement practices. Cornwall’s ‘bedrock’ industries such as tourism and agriculture also offer information economy opportunities. The information economy can impact across the board of businesses – see comment above about information economy as an underpinning element. In general, ICT and the information economy appears to be a cross cutting element, relevant across all business sectors. The enabling function of ICT is likely to be relevant to all C&IoS RIS3 priorities and it is likely that the superfast network in particular offers further opportunities for fostering innovation than have been realised to date. Area for further investigation: Review the creative industries using digital technologies as a possible market opportunity within the overall information economy theme.

‐ Innovation infrastructure; The introduction of superfast broadband has alleviated one of the main barriers to further growth so the

Knowledge and expertise – who and where is this (people and facilities). Are there gaps and what is needed to fill these – with what business benefit

ICT digital sector is now well placed to grasp new opportunities in the exploiting the information economy and “Big Data”. Initial indications show that the introduction of superfast is driving up the level of SME’s transacting on-line in Cornwall, with a recent Superfast Cornwall survey showing 33% of SMEs selling on line (a 50% increase from pre-superfast. The UK average is under 17%)4. Further developments needed to support information economy activity are indicated as:

Further investment in fibre technologies, mobile & wireless infrastructure and demand stimulation to ensure 100% of premises have access to speeds of at least 30Mbps at least 50% of premises are subscribing to services of at least 100Mbps

Data centres The creation of BT Cornwall, could deliver a national centre supplying knowledge based jobs, initially for the provision of services across the county and then nationally exploiting the excellent superfast broadband capability. A number of science and technology based businesses operate in this field, for example including Geoscience and Altcom (geothermal/geophysical engineering), the National Solar Centre, Avanti Communications based at Goonhilly. On the latter point one further aspect of the information economy is the role of satellite communication in facilitating data availability and use, another aspect of innovation infrastructure relevant to the information economy. Given the stage of development now reached with superfast broadband, the timing is right to exploit its extensive coverage in this predominantly rural area, through its application for business benefit. Satellite communication also has the potential to support information economy activities e.g. data collection, GPS, earth monitoring Area for furtherinvestigation: Clarify status/needs of connectivity for IoS


and gaps. What is needed to fill gaps with what

Area for further investigation: There is a need to identify the most effective means to facilitate access to finance to support business R&D innovation and commercialisation in this market opportunity area

business benefit ‐ Skills – what skills are

needed and are these available in C&IoS. Where are the skills gaps and what is needed to fill them.

To benefit fully from the information economy and big data revolution it is suggested C&IoS would need to invest in two extremes of the skill spectrum

a. Digital Inclusion: A digitally literate population is key for a society to benefit fully from the information economy. In Cornwall & IoS , 68,000 (15%) of adults have never used the internet6 (c.f. UK average of 14%) so there is more work to be done if we are to have the citizens of Cornwall “making the most of, and benefiting from, excellent digital services” 1

b. Rural Data Science – ‘data farming’: The ability to understand data is becoming important at all levels of business. Whilst the skill to undertake analysis of large data sets is necessary so is the management-level skill of spotting new insights, services, markets and data-informed decision making. Understanding the issues of data release and privacy and cyber security will also be important skills, particular in data-holding organisation such as local Government. SME benefits, especially in rural areas, could be from development and maintenance of digital/data infrastructure – physical or software-based. Local bespoke data handling and analysis solutions may be locally or regionally based - with superfast or ultra-broadband this could be a new rural industry sector (‘data farming’). There are education and training needs links to this.

The early adoption and evaluation of approaches and technologies – SFBB, Smart Grids, etc., could give C&IoS a skills advantage which could be sold to other regions or countries.


the current markets and what is the extent of competition (and across the supply chain); how may this change through market development and how can C&IoS benefit from change. What is the competitive edge for

Cornwall now has high quality connectivity secured through superfast broadband with a target for 95% coverage by 2015. This gives it a considerable competitive advantage as a rural area. Other information economy clusters are focused in urban locations eg London (Tech City), Cambridge, Sunderland (Software City), Manchester (Media City), Bristol, much of the M4 corridor and Malvern Information economy opportunities are likely in all sectors. The 21,000 businesses in Cornwall & IoS 88% of which are micro businesses offer a test bed for rural information economy innovation where communication, connection and information will be key to delivering more efficient services across the County as well as increasing participation in global and metropolitan markets.

C&IoS ‐ ‐ Demand; to what extent is

this market area demand or solution led; how is demand changing and what is the potential impact of this for business development. Will solutions led markets lead to business development opportunities C&IoS can capitalise on and if so, what are these

The global digital games market could more than double from 2011 to 2016 when it will be worth $53bn

Global revenues in 3 key smart grid markets for 2014 are estimated at: Customer applications: $3bn - $10bn

Smart meters and advanced meter infrastructure: $7bn - $13bn

Grid applications: $5bn - $8bn

Innovation opportunities from Big Data are projected to contribute £24 billion to UK GVA, while the increased prospects for small business creation are projected to be worth £42 billion

Data-driven improvements in targeted customer marketing, the more effective meeting of demand and the analytical evaluation of customer behaviour is forecast to produce £73.8 billion in benefits over the years 2012-17

A UK Technology Foresight report identifies three potentially transformative markets: By the 2020s, the UK could lead a 21st-century manufacturing revolution, fuelled by new

technologies, tools and materials, with local, bespoke manufacturing-on-demand based on 3D printing and a move to product plus service commercial models – ‘servitisation’.

Smart infrastructure could include a smart electric grid, increased use of sensor networks, and ‘cannibalisation’ of existing infrastructure.

The second internet revolution may see the emergence of a ‘web of data’ adding structure and meaning to the data and text of the web, thereby transforming its value. Growth in digital technologies such as mobile networks, remote sensors and cloud computing is creating vast fields of information – Big Data.

To illustrate the market potential, a UK prediction suggests that innovation opportunities from Big Data is forecast to deliver cumulative benefits of £216 billion between 2012 and 2017. Data-driven improvements in targeted customer marketing, the more effective meeting of demand and the analytical evaluation of customer behaviour is forecast to produce £73.8 billion in benefits over the years 2012-17. Whilst satellite and space both have market potential and are clearly innovative (an EU Innova report

identifies R&D spend at 21% of turnover for the space and aeronautics sector), the same report suggests the space sector is dominated by a few large firms, fewer SMEs and larger amount of small space units within larger companies. Information economy opportunities being discussed for C&IoS seem to focus around the third of the transformative markets suggested – web of data. This could have applicability across most business sectors - see comment above about information economy as an underpinning element. Opportunities for significant Cornwall and IoS business gain from space and satellite communications could be limited if there are few numbers of businesses in the market; this requires further clarification. Nevertheless satellite communication has potential to underpin smart sector development and could be a valuable element within any connectivity innovation infrastructure. Areas for further investigation: Clarify the potential for direct jobs and GVA business benefits from space/satellite

4.2.4. Potential Priority Market Specialisation Area: Marine Offshore Renewables C&IoS has potential to become an international market leader in this sector, given its unique location, marine energy resources and accompanying potential for renewable power generation. Offshore wind, wave and tidal generation have significant potential to deliver business growth and help to achieve renewable energy targets, for instance in helping to achieve the target cost reduction of £100 per MWh through innovations in maintaining and servicing offshore wind platforms, as well as component manufacture. There is a role in linking up with research being done elsewhere, for example by Statoil in Norway on floating turbines The UK Renewable Energy Roadmap is seeking some 27 GW from wave and tidal devices by 2050. The technology is still to mature and a number of devices have already been tested off the Cornish coast. The aim in the 2014-20 period is to see devices being tested and moved into a commercial scale. There is opportunity to capitalize on the innovation know- how created in Cornwall locally, the unique demonstrator and test facilities in Cornwall, the academic expertise, the emerging cluster of supply chain businesses in Cornwall accessing the international market, and to grow the export potential. There is potential to co-operate closely on wave energy research e.g. with the European Marine Energy Centre in Orkney, so that C&IoS and Scotland can emerge as technology leaders in wave and tidal energy.

It will be important to ensure that the R&D expertise being developed can also carry forward into innovation activities in the C&IoS economy, with jobs and GVA opportunities and business benefits including supply chain developments. There is therefore a need to consider how this market opportunity is described in order to maximise its innovation potential for C&IoS. For example this could extend into innovations around boat construction and design needed to transport and service offshore equipment or robotics for remote use equipment. There is a good fit with the Atlantic Strategy, which the UK has signed up to, as well as to UK policy in developing marine resources and in particular offshore wind and wave energy.

Knowledge Creation A significant investment has been made in marine energy infrastructure, test facilities and know how in Cornwall over the past eight years. This includes know how in the design and development of unique facilities including :

£42m investment in Wave Hub,a grid-connected offshore facility off the north Cornwall coast for the large scale testing of technologies that generate electricity from wave energy

Investment in know how and expertise through PRIMaRE, a joint project between the University of Exeter and Plymouth University; this project funded an unique set of test facilities including

o South West Moorings test facility in Falmouth Bay, designed and built by experts from the University of Exeter (based at their campus in Cornwall)

o Component reliability test facility (DMAC), currently based at A & P Falmouth, also designed and built by the University of Exeter as above

o Wave energy measurement devices o Wave Tank, based at Plymouth University

Academic expertise, outlined in more detail below

The FabTest site in Falmouth Bay The FaB Test nursery facility enables wave energy device developers to test components, concepts or full scale devices in a moderate wave climate with excellent access to nearby port infrastructure.

The University of Exeter and University of Plymouth collectively provide access to a network of regional, national and international players relevant to the Offshore Renewables (ORE) Sector, including: The Growth and Investment Network (GAIN), which provides a single gateway for business, funding

and start-up support as well as providing access to growth hubs and investor networks across the region

National test centres including the New and Renewable Energy Centre (NaREC), the European Marine Energy Centre (EMEC), the SuperGen Consortium and the ORE Catapult Centre

RegenSW, the renewable energy agency for the South West with a key focus on ORE development, supply-chain support and co-ordination

The MOR group, a cluster of marine offshore technology businesses : MOR is a sub-group within

Cornwall Marine Network (CMN) and was formed by a network of like-minded businesses that are currently providing services to the marine and offshore renewable industry around the UK and overseas

The Plymouth Manufacturers’ Group (PMG), an extensive manufacturing network covering the Plymouth Travel-to-Work area with a collective membership of over 12,000 staff / combined turnover of £1.6bn

Plymouth’s Marine Engineering-focused University Technical College (UTC), providing innovative secondary-level education led by a strong industrial partnership including Princess Yachts and Babcock International

PML Applications, the commercialisation arm of Plymouth Marine Laboratory with strong expertise in Knowledge Transfer and Applied Research within the Marine Sciences, Environment, Energy and Shipping

‐ Public Research; what is

being produced and where is it disseminated/used. Potential to capitalise on this on a local and global stage? Links with local business development – how will this work

Key research areas relevant to the ORE Sector include, at Plymouth University:

Marine management, spatial planning, protection, policy and law Marine, subsea and coastal design and engineering Hydrodynamics, control, materials and structural integrity Marine and coastal systems, assessing and predicting change Resource characterisation Sustainable use and protection of seas and coasts, socio-economic factors Environmental and biodiversity impacts Safe operations and navigational risk

University of Exeter carries out world leading research in renewable energy technologies and has a range of capabilities and facilities which enable it to work across disciplines such as Marine Renewable Energy (MRE). Exeter established its Renewable Energy Group in 2005 at its campus at Penryn in Cornwall and has a strong record in the development and management of collaborative research projects with industrial and other university partners. This includes:

Understanding and assessing the ocean environment Wave prediction and wave energy converter optimisation Marine operations and mooring applications Reliability assessments

Simulating and analysing marine load conditions (numerically and physically) In-field measurements to support oceanographic resource, engineering load or environmental

impact assessments Environmental monitoring Evidence-based policy solutions for potential conflicts between wildlife and MRE Surface and subsea electrical systems and power conditioning

The Peninsula Research Institute for Marine Renewable Energy (PRIMaRE) was established in July 2007 as a joint venture between Plymouth and Exeter Universities, supported by £12M in funding from both institutions as well as the European Regional Development Fund (ERDF). PRIMaRE has created:

Additional research capability and capacity Enduring relationships between academics, businesses and stakeholders A range of complementary equipment and facilities Knowledge Exchange / Knowledge Transfer and targeted business support to SMEs A recognisable brand and an active presence within regional and national networks

It is also worth noting that the Atlantic Action Plan to drive the Blue Economy (through EU Dept of Maritime Affairs) includes actions to develop a high value added marine biotechnology sector and finding ways to accelerate development of marine offshore renewable energy – both relevant and in line with the marine renewables as a priority sector. R&D and prototype testing into wave energy devices (also applicable to tidal energy) is beginning to lead to supply chain development in Cornwall and the Isles of Scilly (e.g. Mojo marine innovating in deployment, A&P shipyard innovating in wave device fabrication, both of whom have local supply chains). Work is now needed to support supply chain development especially in tier 2. R&D and prototype developments could have global reach. Current initiatives are already looking at use of near shore wave devices to support energy provision to remote islands globally; and for use in developing countries who could use smaller scale wave or tidal devices. Offshore wind also has a potentially global market and testing is shortly to begin in Cornwall on a floating offshore wind turbine. Areas for further investigation:

Scoping the tier 2 supply chain potential Scoping the broader marine technology services potential linked to this



Cornwall has a concentration of research and development-focused private sector consultancies and innovative SMEs related to offshore renewable; for example, Mojo Maritime is a marine operations company that is now providing specialist hydrodynamic consultancy services and is a co-developer of innovative deployment and installation solutions. Wave energy technology developers Fred Olsen, OPT, OWEL and RCH Marine Renewables are all active in the County, working alongside local marine specialists such as A&P Falmouth, Keynvor Morlift, Falmouth Divers and Armada Marine Hydraulics. The current base is relatively small, reflecting that wave energy is very much an early stage market that is in development. It is currently a relatively specialist area. However the supply chain could reach out quite widely e.g. diving, engineering. It has the potential to develop skilled knowledge based businesses that could have international markets but operating from C&IoS, given the significant global potential for offshore wind and wave energy. Areas for further investigation:

Clarify the extent to which C&IoS could further capture supply chain opportunities and what the potential is in the future; for example the design and fabrication of boats and other offshore structures, design and fabrication of wave devices; specialist deployment technology, offshore services, design of instruments to measure environmental conditions and associated monitoring systems, use of robotics for remotely controlled equipment and remote sensing equipment

Develop how the ongoing R&D will ensure that local businesses can benefit from it e.g. working with the Marine Offshore Renewables Group (private sector)

‐ Innovation infrastructure; Knowledge and expertise – who and where is this (people and facilities). Are there gaps and what is needed to fill these – with what business benefit

Wave Hub is a grid-connected offshore facility for the large scale testing of technologies. It holds a 25 year lease of 8sq km of sea bed connected to the grid by a 11/33kv subsea cable. The FaB Test nursery facility enables wave energy device developers to test components, concepts or full scale devices in a moderate wave climate with excellent access to nearby port infrastructure. FaB Test’s pre-consented status which allows for up to three devices to be deployed concurrently aims to provide a fast, flexible low cost solution for the testing of wave energy technologies, components, moorings and deployment procedures. The University of Exeter has invested £6m in specialist test facilities which it designed and built including the South West Moorings Test facility, moored in Falmouth Bay and the component reliability

test facility (DMAC). It also has specialist wave energy measurement devices deployed off the Cornish coast. It has recently invested in a flume tank laboratory based test facility. Plymouth University has recently invested £19Million in new marine renewables research facilities to complement the existing capability in the region. This includes the Coastal, Ocean and Sediment Transport (COAST) Laboratory and ship simulator and navigation suite. These facilities include wave tanks that can model combined ocean wave and current conditions as well as shoreline environments. COAST has a dedicated team of academic and technical staff that can assist device developers and support providers to test technology in controlled water conditions. Plymouth University has also recently established a £2m Marine Innovation Centre (MARIC), set-up to accelerate growth in the ORE Sector by creating intelligent connections between businesses, world-class knowledge, technologies, people and infrastructure. The Centre will be focused at Technology Readiness Levels 4-6, directly promoting the industrial uptake and commercialisation of research and emerging technologies and improving the performance of small firms by supporting and stimulating innovation. MARIC will enable innovation by raising industrial awareness of the potential applications and benefits of a range of knowledge, information and technologies and by providing specialist academic and technical staff to work collaboratively with businesses. Falmouth Marine School (FMS), run by Cornwall College, provides exceptional links with the local network of Marine Sector supply-chain companies in Cornwall, particularly around the Falmouth / Penryn area, and acts as a conduit to the research expertise available within the Universities of Plymouth and Exeter. FMS also operates the ERDF-funded Marine Innovation Service (MIS), which offers consultancy, access to facilities, events and industrial links for marine sector SMEs. Key enabling infrastructure may also be advanced materials production. Energy and sustainability are the main drivers of innovation in materials. Materials innovation in particular offers significant opportunities for UK businesses in the area of materials for energy. The TSB has identified the following as important for the energy sector:

Materials for cheaper and more efficient energy storage and management; Materials for energy transmission/distribution that minimise energy, power and thermal loss

during the transmission and distribution process, for example superconductors; and Materials for high-durability energy generation at both small and large scale.

Areas for further investigation: Develop a framework for working with those developers testing devices through testing facilities

in Cornwall, to maximise the supply chain benefits locally. e.g. we understand Fred Olsen (testing at Fabtest) has used A&P and Mojo Maritime to provide fabrication and deployment services to the project

Identify the potential for advanced materials production as part of the supply chain and how C&IoS could capitalise on this

Scope the wider marine technology opportunities that may spill out e.g. boat fabrication to suit deployment of devices. This would demonstrate the potential for wider impact across the C&IoS economy.


and gaps. What is needed to fill gaps with what business benefit

Area for further investigation: Discuss whether businesses may find it difficult to source funding for innovation and R&D and commercialising on this. Could this be an issue going forward and as the supply chain develops. Will it be an issue for those businesses seeking to work in emerging markets with developing countries


Area for further investigation: Discuss the position around skills needs; what might be needed through the supply chain Clarify reference to Levels 4-6 skills in relation to MARIC; whether this is proposed training and

what it will provide in support of commercialising R&D activities


the current markets and what is the extent of competition (and across the supply chain); how may this change through market development and how can C&IoS benefit from change. What is the competitive edge for C&IoS

Cornwall and IoS has competitive advantages through an exceptional set of R&D and prototype testing facilities for wave and tidal energy and its many technological and environmental facets giving it a strong competitive edge through which it is beginning to develop a supply chain. The UK leads the world in ocean energy conversion systems. The South West was recently designated as the UK’s first Marine Energy Park (SWMEP), enabling collaboration between government, Local Enterprise Partnerships (LEPs), technology developers, academia and industry to support the growth of the Sector. Relative to the rest of the UK, and Europe, the South West has an extremely high concentration of relevant infrastructure (ports, grid and demonstration sites), knowledge base assets and supply-chain

capability to support the growth of the ORE sector, with particular strength and opportunity in wave and tidal energies. Scotland too has a very strong focus in this area; with significant wave and tidal resources, it is also home to the UK’s second Marine Energy Park. The Pentland Firth and Orkney Waters Marine Energy Park and the SWMEP recently signed a Memorandum of Understanding (MOU) providing a basis for working together to build relationships, address common issues affecting the industry and to encourage business and research collaboration. Future markets could be global; e.g. existing work in exploring near shore wave devices for renewable energy generation for remote islands which could have global application. Area for further investigation Develop the discussion about future market opportunities and where the R&D and innovation developing in Cornwall and IoS could have wider application e.g. reference to current work on tidal power for remote islands.

‐ Demand; to what extent is this market area demand or solution led; how is demand changing and what is the potential impact of this for business development. Will solutions led markets lead to business development opportunities C&IoS can capitalise on and if so, what are these

The UK Marine Industries Strategy 2011 suggests export opportunities will be key to success in growing the sector. It indicates growth opportunities that include:

Offshore renewables generating c80,000 jobs by 2020

Commercial exports to the global marine market estimated at £3trillion, with high value opportunities in Brazil and Russia

UK Marine science and technology market size at c£650m p.a. in the UK supporting, for example, offshore renewables, environmental monitoring and climate change research

Offshore wind is anticipated to account for c11% of world wind power additions to capacity by 2018

with OECD European countries the majority supplier UKTI estimates that the UK will invest up to £75bn in offshore wind farms by 2020, and the growth

of wave and tidal industry could attract up to £4bn per annum of investment by 2050. The global tidal range energy potential is estimated to be about 2.5-3 TW, with c1 TW being

available at comparably shallow waters. Estimates of potential electricity generation vary between

200-400 TWh. (Source: IEA-OES Annual Report, 2009 cited in an online summary of a 2011 report11). The report suggests the realizable potential for wave and tidal together could be up to c25% of the total world demand for electricity

Policies are a strong driver of growth in renewable energy. Potential for growth is forecast at different levels depending on the strength of policies towards renewables. For those countries with a high renewables policy outlook, the market growth potential could be as high as 50% - 90% by 2050. This makes renewable energy more of a solutions led market approach but one where the policy drivers are long term. An OECD 2013 report notes that 138 countries have renewable energy targets and 127 renewable energy support policies (feed in tariffs and renewables standards mainly)

Area for further investigation: Elaboration of the supply chain potential from this for C&IoS

11 http://www.altprofits.com/ref/report/ocean/ocean.html

1.3. Review Findings In terms of the proposed Smart Specialisation strands, the review suggests: Market opportunities exist in all the themes discussed. Securing the

jobs and GVA benefits for C&IoS will need to come from further work to identify how businesses can work with R&D and knowledge sources (which may not be exclusively HE) to commercialise R&D through innovations (including supply chain opportunities); and ensuring that all investments through Smart Specialisation make this link

Offshore renewables R&D activity may be too closely defined given that local business growth is important stemming from R&D and its use in the global marketplace, and the spin offs from this sector are likely to be more broadly marine in nature. A broader marine technologies services approach may be more appropriate. We therefore suggest that the scope is tested through further work

The information economy may be better re-cast as a cross cutting enabler rather than a smart specialisation strand in its own right.

However there may be aspects which could be considered as a smart specialisation theme related to the Creative Industries sector and where there are a number of subsectors of the creative industries which are at the cutting edge of digital technologies and exploit the broadband infrastructure. Again this needs to be more precisely scoped and tested

The space sector has been briefly reviewed, following its very recent introduction as a possible theme. It would benefit from further review. It is recognised that satellite communication is an important aspect of connectivity on which innovating to move into new market opportunities can depend, for example use of mobile apps. For this reason, it is proposed that satellite communication should be incorporated within the information economy cross cutting enabling theme

There is a need to explore further how businesses can export their innovations beyond Cornwall and the Isles of Scilly into a national and global market; and how R&D can be capitalised on as its own business opportunity given its potential international reach

It is also important to develop overall capacity building with SMEs generally, to raise their understanding of the value of R&D and innovation for economic growth. Integration of innovation capacity development in business support would raise the profile and help to cascade the developments through Smart specialisation. There needs to be an appropriate mix of financial and non financial support to assist businesses to innovate and develop, through the smart specialisation Framework. This should help them access and exploit new knowledge and ideas and help them compete in increasingly global markets. The Smart Specialisation themes and enabling drivers also need to link closely with the broader ‘innovation for growth’ strand of the SIF

There is a lack of knowledge around questions of access to finance.

Some mapping and discussion around access to capital would help to understand what may be needed in the future. This should link to work being undertaken by PriceWaterhouseCooper on identifying financial instruments appropriate to deliver through the SIF

Further work would help to clarify the supply chain reach of potential Smart Specialisation themes, to illustrate the potential for cascading of economic growth potential and achieving jobs and GVA growth

There is limited knowledge of Horizon 2020 and other programmes such as Sector Skills Alliances, or of other schemes such as Marie Curie which can fund 100% of cost of experienced researchers working on secondment to business for up to three years. C&IoS should potentially be looking to engage in at least one H2020 project in each of the three smart sector alliances and at least 3 Marie Curie Secondments per annum. These are quite modest targets but would help internationalisation and knowledge transfer both into and out of C&IoS

4.4 The Smart Specialisation Priorities We propose the smart specialisation framework priorities should be a combination of: - Enabling drivers; connectivity and business capacity development - Smart specialisation strands; agri-tech, e-health, marine

technology services These are all interlinked and can be viewed as a set of interlocking cogs which rotate around each other. They are not separate activities but are mutually inter-dependent and need to be developed in that way. Our proposal for Smart Specialisation in C&IoS is illustrated in the following diagram:

Connectivity

Capacity

Innovation for Growth

Marine (renewables)

Agri Tech

E - Health

Connectivity

Capacity

Innovation for Growth

MarineTechnology

Services

Agri Tech

e-health & e-wellbeing

Research, Innovation and Knowledge

SME Competitiveness

4.4.1 The Enabling Drivers The two enabling drivers are underpinning and have potential to deliver across all business sectors. They are therefore partly in the smart specialisation framework but also, and importantly, part of SME competitiveness (innovation for growth). This ensures that our overall vision to make sure that all businesses are encouraged to innovate is also assured. Connectivity could cover a number of elements, hardware and software, a lot of which could be innovative:

Superfast Broadband network 3G and 4G mobile networks Satellite connectivity Computer science Software development Mobile app development Access & application of Big Data Data management

Capacity could cover:

R&D infrastructure e.g. innovations centres Skills (matching ERDF and ESF) Access to Finance Graduate placements and secondments between academia and

business Knowledge exchange across Europe through developing networks

with regions with similar smart specialisations ( advanced superfast broadband can help to develop connections)

Importantly building the general business awareness and understanding of the value of R&D and innovation

Improving access to other EU funds most notably Horizon 2020 The further work will help to identify what is included within these two drivers

4.4.2 The Smart Specialisation Themes Three smart specialisation themes are currently proposed, based on the review work undertaken:

Agri-tech Marine technology services E-health and e-wellbeing

Further work over the coming months will help to define these three themes. During discussion other linked potential opportunities have arisen. Further work over the next few months to January 2014 is needed to determine their potential or not for inclusion. These are:

Aerospace including space/satellite communications; the existence of the Newquay Aerospace Enterprise Zone and the infrastructure of the Goonhilly site suggest the need for a review e.g. of the potential to link satellite communication into information economy

Creative industries, a significant sector for C&IoS – in particular that part linked to digitally enabled activities and which could include digital media, digital gaming, film and production, design, journalism, publishing, crafts and fine arts

The mid- term review of the SIF may also provide an opportunity to review the smart specialisation themes and include those which have developed post 2013, should work over the next two years highlight this as appropriate.

4.5 Assessment of Priorities in relation to Smart Specialisation Guidance The priorities have been developed within the context of the innovation ecosystem functional model. The model incorporates the thinking behind Smart Specialisation: building on local strengths, competitive advantages and potential for excellence, as well as be able to support technological as well as practice-based innovation and stimulate private sector investment. We now draw the analysis together into a first assessment, effectively a summary drawing on all evidence. This will be elaborated as the Smart Specialisation Framework is further developed. The assessment criteria combine the innovation ecosystem with the EU Smart Specialisation guidance and LEP targets. The assessment also takes a current and a future perspective. The assessment criteria cover: ‐ Strategic R&D fit

o Fit with national/EU priorities ‐ Structural Fund fit

o Potential for cross border and transregional co-op/have an international dimension (emerging markets)

o Potential for linkages across SFs o Potential for Horizon 2020 links

‐ Market fit o Are there potential global market opportunities that C&IoS

businesses can supply into ‐ Economic fit

o Deliver economic transformation o Support competitiveness (building on competitive

strengths)

o Deliver economic growth – (jobs and GVA) in the short term and longer term

‐ Place fit o Build on local assets; USPs

‐ Delivery Fit o Are the framework conditions in place to support

businesses through the Innovation Value Chain, so that innovation leads to commercialisation and added value?

‐ Progress fit o Be monitorable and evaluated (ie evidence can be revisited

against all the above)

Those areas where there appears to be a good fit are indicated by a tick in the table below. However not all elements under each criteria are fully worked through, hence there is also further work needed to fully scope potential, as indicated by a ‘?’ in the table below. The summary indicates that there is evidence that smart specialisation themes will meet the criteria, although there is some further work needed to develop this, notably:

The links across into ESF (skills development) and CLLD in particular within the SIF context; and more broadly around other EU R&D funding routes such as Horizon 2020

Clarifying the business/R&D engagement and routes for cascading innovation through supply chains and the C&IoS business base to build up local and global market opportunities

The fit of innovation support assets and activities in relation to businesses at each stage of the IVC; and clarification of aspects of the innovation functional model wider framework conditions (e.g access to finance)

Development of the investment actions planned for smart specialisation (not part of this commission and still to be developed)

The monitoring and evaluation framework (not part of this commission and still be to be developed)

Initial Assessment of Smart Specialisation Themes Strategic R&D fit

Structural Fund fit Market Fit Economic Fit Place Fit Delivery Fit Progress Fit

Current

Agri‐tech Future

Current E‐health and e‐wellbeing Future

Current Marine

Technology Services Future

5. Recommendations for next steps to develop the Smart Specialisation Framework Our recommendation is that the period to January 2014 is used to strengthen and develop the Smart Specialisation Framework in three ways.

Refine the individual areas of specialisation, so that they can readily lead to project activity (See 5.1 & 5.2 below)

Create a broader base for the establishment of Smart Specialisation governance in line with RIS3 guidelines, particularly through the engagement of private sector in development and decision-making (See 5.3 below)

Alongside the work to create the best possible understanding of the markets for Cornish based innovation (through 5.1 – 5.3 below), to continue the RIS3 strategy development process in line with guidance, and confirming the strategic choices made.

Our detailed recommendations are set out in the following tables12.

12 This will also need to relate to ongoing work to look at potential actions and monitoring/evaluation requirements, as further steps of the Framework development (Steps 5 and 6) and beyond the current commission.

5.1 Developing the currently proposed Smart Specialisation Priorities Area for Development

Recommended Developments

5.1.1 Agri-tech

Clarification about the potential global market opportunities that C&IoS could focus on and their potential to lead agricultural practice and supply chain developments . Clarification on how C&IoS can co-ordinate with others players in the UK to ensure that it is fully integrated into the delivery of the UK strategy

5.1.2 e-health and e-wellbeing

Understand/articulate the business efficiency dimension of e-health and e-wellbeing and how this is a contributor to business growth Engage further with the NHS to explore how innovative ideas might be adopted

5.1.3 Marine Technology Services (as a development from Marine Offshore Renewables)

Review the potential to broaden this subject area to ‘Marine Technology Services’ based upon strengths and the opportunity for the marine sector supply chain to benefit more widely from Offshore Renewables activities. Continue to develop links with other countries potentially Norway, Denmark Finland and Germany.

5.1.4 Connectivity and Capacity Enabling Drivers

Scope the elements to include and how they can enable delivery of the smart specialisation framework for C&IoS. This needs to link to identifying actions within the context of funding opportunities

5.1.5 All priorities

Review and extend global market research to continue identifying market opportunities


Clarify how businesses can export their innovations beyond Cornwall and the Isles of Scilly into a national and global market; and how R&D can be capitalised on as its own business opportunity given its potential international reach


Clarification of the jobs and GVA growth potential of the Smart Specialisation priorities – see recommendations in 5.3

5.2 Reviewing other potential Smart Specialisations Area for Development


5.2.1 Aerospace/satellite

A requirement to review aerospace opportunities in connection with Newquay Enterprise Zone (not part of our brief).

Further discussion to explore and clarify the opportunity for satellite communications; what would this mean, what could be included.

5.2.2 Creative industries

Review of the digitally enabled activities in the creative industries sector, using the format in Section 4. There could be justification for its inclusion if specialisms can be clearly identified.

5.3 The Business/R&D interface Area for Development


5.3.1 Identifying the investments for support

An essential first step is to develop a road map of how and where the R&D and innovation is leading to growth of jobs downstream. The R&D does not create the jobs – it is the application (commercialisation) through innovation that is important and this is where the jobs and GVA will stem from.

5.3.2 Knowledge and awareness of innovation benefits

The capacity enabling driver should support smart specialisation and the wider business base, to raise the profile of innovation and needs to be developed in this way

Potential activities need to be scoped (e.g. innovation ambassadors, peer to peer mentoring).

There is a need to ensure linkages with other EU SIF Strategy priorities and alignment with other funding streams.

5.3.3 Business/HE relations

Ensure all R&D proposals are complemented by a business engagement strategy jointly developed by HE and businesses (this may be longer term beyond January 2014). In the short term to January, use business discussion to continue to identify ways in which business/HE relations can be built up. Make use of outcomes from evaluations and current business surveys around perceptions of relations. Work with HE and businesses to continue to develop how they are responsive and engaged with each other.

Review membership of Innovation Working Group to extend business involvement (see 5.5.4 below)

5.4 Finance and Skills Area for Development


5.4.1 Access to Finance

Mapping and discussion around access to capital to understand what may be needed in the future. There is a need to ensure smart specialisation is considered in development of financial models (linking with work on financial instruments being undertaken by PriceWaterhouseCooper).

5.4.2 Skills needs

Further work to identify gaps in skills delivery necessary to support Smart Specialisation priorities within the Framework

5.5 Strategy development and associated actions Area for Development


5.5.1 Undertake a final rigorous analysis of the evidence base established for all the priorities under consideration in order to finalise the RIS3 Framework that refines Cornwall Innovation partners’ priorities into a coherent and transformative programme of activity. The process should be fully RIS3 compliant, and should ideally include the possibility for external peer review.

5.5.2 Links with other EU R&D funding opportunities

Discuss and identify how the Smart Specialisation Framework priorities can link with other EU research strands such as Horizon 2020 or Marie Curie researcher funding. This needs to be developed urgently in parallel with current work in preparing the SIF (see Appendix 1)

5.5.3 Business innovation surveys

There is some baseline information at a business level around innovation, using the Nesta business survey. Developing use of the Nesta business questionnaire to update and extend the information available should be considered. Options for use (not mutually exclusive) could be:

Carry out a business survey in October/November (but we are aware of concerns around business consultation overload which may mitigate against this). This should include coverage of businesses in the smart specialisation themes as well as other businesses more broadly

Consider use of the questionnaire as part of business engagement in the Smart Specialisation Framework/Innovation through growth – e.g. through its use as part of an application process, initial information requirement and subsequent monitoring requirement

5.5.4 Innovation working group representation

Review Innovation working group membership which is biased towards HE involvement. It would benefit from further inclusion of business interests13, given that Smart Specialisation needs to develop the relationship between businesses and R&D. It is noted that the Innovation Board membership is balanced with 50% private sector

13 The Cornwall Chamber of Commerce is a member

representation. 5.5.5 The C&IoS innovation scorecard

Reassess the scorecard once further work has been undertaken as a stakeholder (including business representation) task eg through Innovation Working Group/business representation, and agree ratings to include in the Smart Specialisation Framework.

Our recommendation is that all further discussion and clarification is set within the structure of the innovation ecosystem functional model and considered in relation the innovation value chain, so it is clear all aspects of the innovation environment and business needs to engage with R&D and innovation are being considered. Going forward, actions can then be much more clearly defined

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